The Straits Times / The Business Times News on Hyflux

Hyflux's gains rise 7% to $10m

WATER treatment company Hyflux yesterday posted a 7 per cent rise in first-quarter net profits to $9.6 million, but the company said the rise would have been much higher but for a technical accounting change.

Net profits for the quarter ended March 31 would have shot up 175 per cent if not for the change brought in last year.

The adoption of Financial Reporting Standard (FRS) 39 in 2005 caused an unrealised fair value gain on financial instruments of about $5.5 million in the first quarter last year, which had the effect of inflating net profits for that period.

Revenue in the first quarter this year increased by 39 per cent to $33.7 million, largely driven by a 217 per cent leap in industrial sales.

China accounted for 56 per cent of revenues, a big jump from 22 per cent in the previous period, lifted by both sales to private industry and municipal projects.

This shift in revenue breakdown was also affected by the sale of two projects in the Middle East earlier this year.

Hyflux chief executive and president Olivia Lum said: 'We have projects in over 20 cities in China and we are currently bidding for more. We have started work on the Tianjin project and we expect to complete it by next year.

'However, investors can still expect a high amount of orders to come in from the Middle East.'

Earnings per share fell to 1.86 cents, from 1.89 cents last year. Net assets value per share rose 2.7 cents to 39.5 cents.

The stock closed 1.5 per cent lower at $2.69 yesterday.